A-14790, JUNE 24, 1926, 5 COMP. GEN. 1022

A-14790: Jun 24, 1926

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

STATE TAX ON GASOLINE THE FACT THAT THE CONSIDERATION NAMED IN A CONTRACT FOR FURNISHING GASOLINE TO THE GOVERNMENT IS STATED AT A DEFINITE PRICE PER GALLON PLUS ANY TAX THAT MAY BE IMPOSED ON SUCH SALE DOES NOT RELIEVE THE GOVERNMENT FROM THE PAYMENT OF THAT PORTION OF THE CONSIDERATION EQUAL TO THE AMOUNT OF THE TAX WHERE SUCH TAX IS IMPOSED BY STATE LAW ON THE DEALER AND NOT ON THE PURCHASER. NOR IS THE RIGHT OF THE CONTRACTOR AFFECTED BY THE FACT THAT THE GOVERNMENT MAY BE ENTITLED TO APPLY TO THE STATE FOR A REFUND EQUAL TO THE AMOUNT OF THE TAX SO PAID BY REASON OF THE USE TO WHICH THE GASOLINE IS TO BE PUT. WITH REQUEST FOR DECISION WHETHER PAYMENT THEREON IS AUTHORIZED AN UNPAID VOUCHER IN FAVOR OF THE STANDARD OIL CO.

A-14790, JUNE 24, 1926, 5 COMP. GEN. 1022

STATE TAX ON GASOLINE THE FACT THAT THE CONSIDERATION NAMED IN A CONTRACT FOR FURNISHING GASOLINE TO THE GOVERNMENT IS STATED AT A DEFINITE PRICE PER GALLON PLUS ANY TAX THAT MAY BE IMPOSED ON SUCH SALE DOES NOT RELIEVE THE GOVERNMENT FROM THE PAYMENT OF THAT PORTION OF THE CONSIDERATION EQUAL TO THE AMOUNT OF THE TAX WHERE SUCH TAX IS IMPOSED BY STATE LAW ON THE DEALER AND NOT ON THE PURCHASER, NOR IS THE RIGHT OF THE CONTRACTOR AFFECTED BY THE FACT THAT THE GOVERNMENT MAY BE ENTITLED TO APPLY TO THE STATE FOR A REFUND EQUAL TO THE AMOUNT OF THE TAX SO PAID BY REASON OF THE USE TO WHICH THE GASOLINE IS TO BE PUT.

COMPTROLLER GENERAL MCCARL TO MAJ. E. T. COMEGYS, UNITED STATES ARMY, JUNE 24, 1926:

THERE HAS BEEN RECEIVED YOUR LETTER OF MAY 26, 1926, FILE ANR/CEP, INCLOSING, WITH REQUEST FOR DECISION WHETHER PAYMENT THEREON IS AUTHORIZED AN UNPAID VOUCHER IN FAVOR OF THE STANDARD OIL CO. FOR $1,909.76 COVERING THE VIRGINIA TAX OF 4 1/2 CENTS PER GALLON ON 42,439 GALLONS OF GASOLINE PURCHASED BY THE WAR DEPARTMENT UNDER AIR SERVICE CONTRACT NO. 7691, DATED JANUARY 14, 1926.

THE MATERIAL FACTS IN THE CASE ARE AS FOLLOWS:

BY THE CONTRACT CITED THE STANDARD OIL CO. OF NEW JERSEY SOLD TO THE GOVERNMENT A QUANTITY OF AVIATION GASOLINE IN ACCORDANCE WITH UNITED STATES ARMY SPECIFICATION NO. 2-40D, DATED JANUARY 5, 1924,"AT THE UNIT PRICES SPECIFIED, AT THE DELIVERY POINTS INDICATED, AND IN COMPLIANCE WITH THE TERMS AND CONDITIONS OF AIR SERVICE ORDER NO. 26308," COPY OF WHICH WAS ATTACHED TO AND MADE A PART OF THE CONTRACT, FOR THE SUM OF $41,568.10, PAYMENT TO BE MADE AFTER FINAL INSPECTION AND ACCEPTANCE AT DESTINATION.

THE AIR SERVICE ORDER REFERRED TO FIXED THE QUANTITY OF GASOLINE AND THE PRICES TO BE PAID THEREFOR AS FOLLOWS:

TABLE

QUANTITY DELIVERY POINT UNIT PRICE TOTAL PRICE 63,000 GALLONS ----- BOLLING FIELD, D.C ------- 0.1786 $11,251.80 161,000 GALLONS ---- LANGLEY FIELD, VA -------- .1883 30,316.30

TOTAL ----------------------------------------------- 41,568.10 WITH THE FOLLOWING PROVISION: "ABOVE PRICES ARE EXCLUSIVE OF TAX; SHOULD ANY TAX APPLY TO SALES MADE PURSUANT TO THIS ORDER THE AMOUNT OF SUCH TAX WILL BE ADDED TO THE PRICES HEREIN STATED.'

DELIVERY WAS MADE OF 42,439 GALLONS TO LANGLEY FIELD AND INVOICES RENDERED THEREFOR AT $0.1883 PER GALLON ON MARCH 31 AND APRIL 1, 1926, PAYMENT OF THE INVOICE PRICE BEING MADE ON VOUCHER 2875, APRIL, 1926, ACCOUNTS OF MAJ. E. T. COMEGYS. ON MAY 7, 1926, A BILL WAS RENDERED BY THE CONTRACTOR FOR $1,909.76 COVERING THE TAX OF 4 1/2 CENTS PER GALLON IMPOSED BY THE ACT OF THE GENERAL ASSEMBLY OF THE COMMONWEALTH OF VIRGINIA APPROVED MARCH 10, 1926, AND IT IS THIS AMOUNT WHICH IT IS PROPOSED TO PAY ON THE VOUCHER SUBMITTED.

IN SO FAR AS IS HERE MATERIAL, THE STATUTE OF VIRGINIA REFERRED TO IS AS FOLLOWS:

SEC. 1. THE FOLLOWING WORDS, TERMS, AND PHRASES USED IN THIS ACT ARE FOR THE PURPOSES HEREOF DEFINED AS FOLLOWS:

(C) THE TERM "DEALER" IS HEREBY DEFINED AS ANY PERSON, ASSOCIATION OF PERSONS, FIRM, OR CORPORATION WHO OR WHICH IMPORTS, OR CAUSES TO BE IMPORTED, IN THE STATE OF VIRGINIA, MOTOR-VEHICLE FUELS, AS HEREIN DEFINED, FOR USE, DISTRIBUTION, OR SALE AND DELIVERY IN AND AFTER THE SAME REACH THE STATE OF VIRGINIA; AND ALSO ANY PERSON, ASSOCIATION OF PERSONS, FIRM, OR CORPORATION WHO OR WHICH PRODUCES, REFINES, MANUFACTURES, OR COMPOUNDS SUCH FUELS IN THE STATE OF VIRGINIA FOR USE, DISTRIBUTION, OR SALE AND DELIVERY IN THIS STATE. PERSONS, ASSOCIATIONS, FIRMS, AND CORPORATIONS IMPORTING, OR CAUSING TO BE IMPORTED, INTO THIS STATE, FOR THEIR OWN USE, SUCH FUELS IN ANY CONTAINER OTHER THAN THE USUAL TANK OR RECEPTACLE CONNECTED WITH THE ENGINE OF THE MOTOR VEHICLE IN THE OPERATION OF WHICH THE FUEL IS TO BE CONSUMED, AND PERSONS, ASSOCIATIONS, FIRMS, OR CORPORATIONS PRODUCING, REFINING, MANUFACTURING, OR COMPOUNDING SUCH FUELS IN THIS STATE FOR THEIR OWN USE, SHALL ALSO BE CONSIDERED DEALERS WITHIN THE MEANING OF THIS ACT.

SEC. 2. IN ADDITION TO THE TAXES NOW PROVIDED BY EXISTING LAW, EVERY DEALER, AS HEREIN DEFINED, WHO IS NOW ENGAGED OR WHO MAY HEREAFTER ENGAGE, IN HIS OWN NAME, OR IN THE NAME OF OTHERS, OR IN THE NAME OF HIS REPRESENTATIVES OR AGENTS IN THIS STATE, IN THE SALE, DISTRIBUTION, OR USE OF MOTOR-VEHICLE FUELS, AS HEREIN DEFINED, SHALL, NOT LATER THAN THE TWENTIETH OF EACH CALENDAR MONTH, RENDER TO THE MOTOR-VEHICLE COMMISSIONER A STATEMENT ON FORMS PREPARED AND FURNISHED BY THE SAID COMMISSIONER, WHICH SHALL BE SWORN TO BY ONE OF THE PRINCIPAL OFFICERS, IN THE CASE OF DOMESTIC CORPORATIONS, OR BY THE RESIDENT GENERAL AGENT OR ATTORNEY IN FACT, BY A CHIEF ACCOUNTANT OR OFFICER, IN CASE OF FOREIGN CORPORATIONS, BY THE MANAGING AGENT OR OWNER, IN CASE OF A FIRM OR ASSOCIATION OF PERSONS, OR BY THE DEALER IN ALL OTHER CASES, WHICH STATEMENT SHALL SHOW THE QUANTITIES OF MOTOR VEHICLE FUELS SOLD AND DELIVERED, OR USED, WITHIN THE STATE OF VIRGINIA DURING THE PRECEDING CALENDAR MONTH, AND SUCH DEALER SHALL AT THE SAME TIME PAY THE TAX OR TAXES HEREINAFTER LEVIED ON ALL MOTOR VEHICLE FUELS SOLD AND DELIVERED, OR USED, AS SHOWN BY SUCH STATEMENT.

BILLS SHALL BE RENDERED TO ALL PURCHASERS OF MOTOR-VEHICLE FUELS BY DEALERS SELLING THE SAME. THE SAID BILLS SHALL CONTAIN A STATEMENT PRINTED THEREON IN A CONSPICUOUS PLACE THAT THE LIABILITY TO THE STATE FOR THE TAX OR TAXES HEREBY IMPOSED HAS BEEN ASSUMED, AND THAT THE DEALER WILL PAY THE TAX OR TAXES THEREON ON OR BEFORE THE TWENTIETH DAY OF THE FOLLOWING MONTH.

SEC. 3. THERE IS HEREBY LEVIED A TAX OF FOUR AND ONE-HALF CENTS PER GALLON ON ALL MOTOR-VEHICLE FUELS, AS HEREIN DEFINED, WHICH ARE SOLD AND DELIVERED, OR USED, IN THIS STATE, AND ARE NOT UNDER THE PROTECTION OF THE INTERSTATE COMMERCE CLAUSE OF THE CONSTITUTION OF THE UNITED STATES. BUT NOTHING HEREIN SHALL BE CONSTRUED TO EXEMPT FROM THE TAX ANY DISTRIBUTOR OF GAS OR OILS ON THE GAS USED IN MAKING SUCH DISTRIBUTION.

SEC. 4. THE SAID TAX OR TAXES SHALL BE PAID ON OR BEFORE THE TWENTIETH DAY OF EACH MONTH, AS HEREIN PROVIDED, TO THE MOTOR-VEHICLE COMMISSIONER, WHO SHALL RECEIPT TO THE DEALER THEREFOR, AND LESS ANY REFUNDS MADE UNDER THIS ACT, AND THE NECESSARY EXPENSES INCURRED IN THE ADMINISTRATION THEREOF, PROMPTLY PAY THE SAME INTO THE STATE TREASURY. * * *

SEC. 7. ANY PERSON, ASSOCIATION OF PERSONS, FIRM, OR CORPORATION WHO SHALL BUY, IN QUANTITIES OF FIVE GALLONS OR MORE AT ANY ONE TIME, ANY MOTOR-VEHICLE FUELS AS DEFINED IN THIS ACT FOR THE PURPOSE OF, AND THE SAME IS ACTUALLY USED FOR, OPERATING OR PROPELLING BOATS, SHIPS, AEROPLANES OR AIRCRAFT, STATIONARY GAS ENGINES, TRACTORS USED FOR AGRICULTURAL PURPOSES, AND MOTOR EQUIPMENT BELONGING TO CITIES AND TOWNS USED EXCLUSIVELY IN MUNICIPAL ACTIVITIES, OR WHO SHALL PURCHASE AND USE ANY OF SUCH FUELS FOR SPRAYING PURPOSES, OR FOR CLEANING, DYEING, OR OTHER COMMERCIAL USE, EXCEPT IN MOTOR VEHICLES OPERATED OR INTENDED TO BE OPERATED IN WHOLE OR IN PART UPON ANY OF THE PUBLIC HIGHWAYS, STREETS, OR ALLEYS OF THIS STATE, ON WHICH MOTOR FUELS THE TAX OR TAXES IMPOSED BY THIS ACT SHALL HAVE BEEN PAID, SHALL BE REIMBURSED AND REPAID THE AMOUNT OF SUCH TAX OR TAXES PAID BY HIM UPON PRESENTING TO THE SECRETARY OF THE COMMONWEALTH (NOW MOTOR-VEHICLE COMMISSIONER) AND AFFIDAVIT ACCOMPANIED BY A TICKET, INVOICE, OR OTHER DOCUMENT FROM THE DEALER OR RETAIL DISTRIBUTOR, SHOWING SUCH PURCHASE, WHICH AFFIDAVIT SHALL SET FORTH THE TOTAL AMOUNT OF SUCH FUEL SO PURCHASED AND USED BY SUCH CONSUMER, OTHER THAN IN MOTOR VEHICLES OPERATED OR INTENDED TO BE OPERATED UPON ANY OF THE PUBLIC HIGHWAYS, STREETS, OR ALLEYS OF THIS STATE, AND HOW USED; AND THE SECRETARY OF THE COMMONWEALTH (NOW MOTOR-VEHICLE COMMISSIONER) UPON THE PRESENTATION OF SUCH AFFIDAVIT AND SUCH TICKET, INVOICE, OR OTHER DOCUMENT SHALL REPAY TO SUCH CONSUMER FROM THE TAXES COLLECTED ON MOTOR VEHICLE FUELS THE SAID TAXES PAID ON FUELS SOLD AND DELIVERED AND USED OTHER THAN FOR MOTOR VEHICLES AS AFORESAID: PROVIDED, THAT APPLICATION FOR REFUNDS AS PROVIDED HEREIN MUST BE FILED WITH THE SAID SECRETARY (COMMISSIONER) WITHIN SIXTY DAYS FROM THE DATE OF SALE OR INVOICE, ON FORMS PREPARED AND FURNISHED BY SAID SECRETARY (COMMISSIONER). (ACT 1923, CHAPT. 107.)

ON EACH INVOICE RENDERED FOR THE GASOLINE CERTIFICATION WAS MADE IN ACCORDANCE WITH LAW THAT THE TAX OR TAXES HAD BEEN ASSUMED BY THE DEALER, WHICH RENDERED THE CONTRACTOR LIABLE TO THE STATE FOR THE PAYMENT OF SAID TAXES ON OR BEFORE THE 20TH DAY OF THE FOLLOWING MONTH UNDER THE PENALTIES PROVIDED IN SAID LAW. THE CONTRACTUAL OBLIGATION TO REIMBURSE THE CONTRACTOR FOR THE TAXES PAID IN ADDITION TO PAYING THE FIXED PRICE OF $0.1883 IS CLEAR UNLESS SAID TAX IS IMPOSED AS A TAX ON THE CONSUMER AND NOT ON THE DEALER.

IN DECISION RENDERED ON DECEMBER 1, 1923, 3 COMP. GEN. 348, IN CONSIDERING THE GASOLINE TAX LAW OF SOUTH CAROLINA, WHICH IS SIMILAR TO THAT OF VIRGINIA, AND WHERE THE CONTRACT PROVIDED---

THE PRICES HEREIN STATED ARE EXCLUSIVE OF ANY TAX LEVIED BY THE UNITED STATES OR ANY STATE OR MUNICIPALITY THEREOF WITH RESPECT TO THE SALE OF GASOLINE, AND SHOULD ANY SUCH TAX APPLY TO DELIVERIES MADE UNDER THIS CONTRACT THE AMOUNT OF SUCH TAXES WILL BE ADDED TO THE PRICES HEREIN SPECIFIED---

IT WAS HELD:

THE IMPOSITION BY THE STATE OF SOUTH CAROLINA, UNDER ACT APPROVED FEBRUARY 23, 1922, OF A LICENSE TAX OR FEE, MEASURED BY AN AMOUNT OF MONEY EQUAL TO 2 CENTS PER GALLON ON THE QUANTITY OF GASOLINE SOLD WITHIN THE STATE, BEING PLACED ON THE DEALER AND NOT ON THE PURCHASER, BE THE PURCHASER THE GOVERNMENT OR AN INDIVIDUAL, IT WOULD APPEAR THAT THE LICENSE TAX OR FEE OF 3 CENTS IN THE INSTANT CASE IS BASED ON AN AMENDMENT OR REVISION OF THE STATE LAW INCREASING THE BURDEN ON THE DEALER FROM 2 TO 3 CENTS. PAYMENT ON A VOUCHER SHOWING CONTRACT PRICE OF 14 CENTS PER GALLON PLUS 3 CENTS PER GALLON IMPOSED AS A TAX ON THE DEALER BY THE STATE, CITING THE ACT APPLICABLE, IS AUTHORIZED.

SEE ALSO 3 COMP. GEN. 781.

SO, IN THE INSTANT CASE, WHILE THE TAX IS PASSED ON TO THE CONSUMER UNDER THE TERMS OF THE CONTRACT PROVIDING FOR AN INCREASE IN PRICE EQUAL TO THE AMOUNT OF THE TAX IMPOSED, SAID TAX IS PRIMARILY IMPOSED ON THE DEALER WHO IS RESPONSIBLE TO THE STATE FOR SAID TAX.

THE GASOLINE HAVING BEEN USED FOR AVIATION PURPOSES, THE FEDERAL GOVERNMENT AS A CONSUMER, UNDER SECTION 7 OF THE STATUTE, SUPRA, IS ENTITLED TO A REFUND FROM THE STATE OF THE AMOUNT OF TAX COLLECTED ON SAID GASOLINE, AND IF CLAIM HAS NOT BEEN FILED THEREFOR IT SHOULD BE FILED IMMEDIATELY. AS THE INVOICE FOR THE AMOUNT OF THE TAX WAS RENDERED ON MAY 8, 1926, THE LIMITATION OF 60 DAYS SHOULD BE COMPUTED FROM THAT DATE.

CLAIMS FOR REFUND OF TAXES ON GASOLINE TO WHICH THE GOVERNMENT IS ENTITLED SHOULD BE MADE IMMEDIATELY UPON RECEIPT OF INVOICES, IT NOT BEING NECESSARY TO MAKE PAYMENT OF SUCH INVOICES BEFORE FILING CLAIMS FOR REFUND OF TAXES. SEE CIRCULAR NO. 20 OF APRIL 22, 1925, 4 COMP. GEN. 1081; ALSO 4 COMP. GEN. 1041.

HOWEVER, THE LIABILITY OF THE GOVERNMENT TO THE CONTRACTOR IS NOT DEPENDENT UPON WHETHER OR NOT REFUND CAN BE SECURED FROM THE STATE OF THE AMOUNT OF TAXES COLLECTED BUT UPON THE TERMS OF THE CONTRACT UNDER WHICH THE CONTRACTOR IS ENTITLED TO THE REIMBURSEMENT PROPOSED TO BE MADE ON THE VOUCHER IN QUESTION.

YOU ARE ACCORDINGLY ADVISED THAT PAYMENT ON THE VOUCHER SUBMITTED IS AUTHORIZED.